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US fiscal cliff: Obama cuts short holiday to reach deal
27 December 2012 Last updated at 02:56 GMT
US President Barack Obama has cut short his holidays in Hawaii and is flying to Washington to try to reach a deal to avoid the so-called "fiscal cliff".
Unless a compromise is found, tax increases and huge spending cuts come into force on 1 January, threatening to tip the US back into recession.
However, Democrats and Republicans are still at loggerheads over the issue.
Meanwhile, the US Treasury is to take extraordinary measures to delay reaching a 31 December borrowing limit.
In a letter to Congress, Treasury Secretary Timothy Geithner said it would take accounting measures to save about $200bn to prevent reaching the $16.4tn borrowing limit.
He said this would prevent the government from reaching the borrowing limit for about another two months.
This $16.4tn is the amount the government is allowed to borrow to finance its operations.
'Silent corridors'
Mr Obama is expected meet Republican leaders again to try to negotiate a solution, although no new date has been announced.
Failure to do so could damage the US and global markets, and threatens to send the US economy into recession.
The two sides remain far apart on the fiscal cliff's $600bn in tax rises and spending cuts, but analysts say a short-term deal may be agreed that will postpone the cuts until spring.
On Wednesday, the Republican House of Representatives Speaker John Boehner called on the Democrat-led Senate to come up with legislation on how it would avoid the cliff, and pass it to the House for consideration.
However, a senior administration official said it was up to Republican leaders not to stand in the way of an agreement.
Despite this, there is little sense of urgency in the capital—the corridors of Congress are silent, the BBC's Zoe Conway in Washington reports.
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